Hormones of the hypothalamic-pituitary axis (HP) exert direct behavioral effects, by activation of specific receptors in brain or by modulation of central neurotransmitter systems. The synthesis and release of HP hormones is partially under the control of the monoaminergic neurotransmitters and psychoactive agents. Current studies concentrate on measurement and administration of behaviorally active peptides, particularly vasopressin (VP), as well as on comprehensive tests of HP function, including dopamine infusion. Major findings this year are: CSF VP is significantly higher in drug free manic compared with drug free bipolar depressed patients, while it tends to be lower in bipolar depressed patients compared with controls. The threshold and sensitivity of the VP response to sustained hypertonic saline infusion is greater in bipolar patients during the manic phase than the depressed phase. DDAVP, a specific analog of VP, produced significant amelioration of depression and psychosis in some patients with affective illness; in addition, DDAVP significantly enhanced to formation, encoding, and organization of long-term trace events in memory in both patients and control subjects.